January 14, 2009
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News: Should the CC Industry be Using a ‘Spyglass' on Our Lives?
The practice is certainly not new. But recent abuses are now coming to light that point out the potential for further widespread abuse by the industry due to lack of government regulation. There are ‘good sides' and ‘bad sides' to the ability the credit card industry has in monitor our ‘types of purchases'. Now that we know that ‘big brother is watching', perhaps we should establish proper boundaries. We're talking about the application of ‘confidential data mining' A four-digit code is stored in a huge database every time a credit card consumer makes a purchase on a card. By use of what is called the MCC (Merchant Category Code) by the industry, credit card purchases are categorized by what type of business card holders make purchases.
One legitimate use of this is to control the use of specialized credit cards like business cards and HSA cards. The owner of a business should be able to disallow abuse of company expense accounts from things like strip clubs or gambling. Most Health Savings Accounts (HSAs) are tax-deferred (and then deducted) with the IRS and intended only for use with medical purchases. So, these credit card accounts are set up to reject improper purchases by checking against an acceptable MCC table. A good thing.
But, what about the ‘open abuse door' that would allow data mining to do other things with this information. Most people don't realize the radical transformation that has swept over information technology. With the advent of quantum processing capabilities in the world now, few realize that raw data now is used in the form of big brother spying on each of our lifestyles. No longer, just a one-line statement about us. Every move we make electronically, credit card purchases or otherwise, is stored some where. Behavior patterns are being targeted. No conspiracy here, this is the lifeblood of the marketing industry. It doesn't require a sharp mind to reason that anyone else with money and power will also use this ability for their own purposes; good or evil. Yet, like the internet a few years ago, this has grown so quickly that government protections for the consumer today just aren't there.